The Aston Martin (LON: AML) share price is hovering near its all-time low as investors remain cautious about the company’s turnaround strategy. The stock is trading at 708p, which is slightly above the all-time low of 546p. It is also about 94% below its all-time high, bringing its total market cap to about £836 million.
Is Lawrence Stroll’s turnaround working?
Aston Martin is one of the most iconic British automakers that is well-known for its use in James Bond movies.
However, the company, which was saved a few years ago by Lawrence Stroll, has struggled. Its stock price has crashed by more than 90% since going public. In the same period, Ferrari’s stock has risen by more than 50%, bringing its market cap to about $35 billion.
There are several reasons why the Aston Martin share price has crashed. First, unlike Ferrari, the firm is a money pit, that has lost money in the past three straight years. In 2021, its net loss was about $259 million. Ferrrari has maintained its profitability.
Second, Aston Martin has had a lot of CEO turnover in the past few years. The company lost its CEO, Tobias Moers in May. He was replaced by Amadeo Felisa, a former CEO of Ferrari. It has lost three CEOs in the past three years. Historically, high CEO turnover is usually a bearish sign of a company.
Third, Aston Martin’s performance in Formula 1 has not helped. In 2021, the company was position seven in the constructors’ championship. The situation has worsened in 2022, where it is currently at position 9 as Sebastian Vettel has only 5 points and Lance Stroll has only 2.
Will Aston Martin share price recover?
Still, Aston Martin share price has several potential catalysts. For one, its business is still doing well with most of its cars being sold out for the year. Its DBX707 orders have risen by over 60% from the previous year while the new V12 Vantage’s 333 units have sold out.
In its most recent announcement, the company said that it was on track to deliver 10,000 wholesale cars and reach a revenue of £2 billion by 2024. It expects to sell 6,600 units in 2022 and increase its margins by between 350 and 450 basis points.
Further, while the company is still making losses, it is relatively cheap with its £835 million valuation. As such, there is a possibility that it could be acquired.
Aston Martin share price forecast
The daily chart shows that the AML share price has been in a strong downward trend lately. Along the way, it remains below the 25-day and 50-day moving averages. The shares have also moved below the descending trendline that is shown in black.
It also seems like it has formed a bearish descending trendline. Therefore, in the near term, the stock will likely have a bearish breakout, with the next key support being at 600p.
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